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TMI Blog2012 (1) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses was statutorily required for maintaining a company. Thus, the addition so made should be deleted. (ii) Without prejudice to above ground no. 1, the ld. CIT(A) erred in law and on facts in not restricting the disallowance u/s 14A to the extent of ₹ 2,00,849/- being the total expenses claimed by the assessee for the year ignoring the fact that disallowance u/s 14A for expenses relating to exempt income cannot exceed the total expenses claimed by the assessee in any manner. Thus, the disallowance should be restricted to ₹ 2,00,849/- and the addition in excess to the said amount should be deleted. (iii) Without prejudice to above ground no. 1 and 2, the ld. CIT(A) erred in law and on facts in not allocating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly those expenses which have been incurred in earning the tax-free income. The ld. CIT(Appeals) considered the facts of the case and submissions made before him. He came to the conclusion that the provisions contained in Rule 8D are applicable to this year (assessment year 2008-09), as held by the Hon ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. Ltd. Vs. DCIT, (2010) 194 Taxman 203. Therefore, the AO had no option but to work out the disallowance in accordance with the aforesaid provisions. Accordingly, the appeal of the assessee has been dismissed. 3. Before us, it is submitted that the assessee earned dividend income of ₹ 3,848/- only on investments in shares of about ₹ 5.20 crore. It was submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer is not satisfied with the correctness of the claim of the assessee in this behalf, he shall determine the amount of expenditure incurred in relation to earning such income. From the plain statutory language it follows that the assessing officer has to consider the claim of the assessee with reference to the accounts and the method prescribed for determining the disallowance has to be followed only if he is not satisfied with the claim made by the assessee. This procedure also applies in a case where it is claimed that no expenditure has been incurred, as provided in sub-section (3). It will be clear from the aforesaid that the assessing officer has to first examine the claim made by the assessee with reference to books of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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